CMC Markets Weekly Report

U.S. stocks closed higher Friday, shaking off losses following disappointing new-home-sales data. The Dow Jones Industrial Average rose 46.77 points, or 0.3 per cent, to close at 15,010.51. Both the S&P 500 Index and the Nasdaq Composite Index, however, snapped their two-week losing streaks. The S&P 500 index rose 6.54 points, or 0.4 per cent, to close at 1,663.50 and the Nasdaq Composite advancing 19.09 points, or 0.5 per cent, to close at 3,657.79, for a weekly gain of 1.5 per cent.

Earlier in the morning, stocks faced headwinds from the release of new home sales data, which was much weaker than expected. Sales of new homes in the United States fell from a 455,000 annual rate in June to 394,000 in July, below expectations for a result near 490,000. The weekly Economic Cycle Research Institute leading index eased from a 4.7 per cent annual rate to 4.5 percent, casting doubts on the nascent housing recovery, the central bank currently views as a rare growth centre in the economy.

Over the weekend, central bankers from around the world gathered for their annual symposium at Jackson Hole, Wyoming. There was some discussion among the speakers over the potential winding back of Fed's $US85 billion-a-month bond-purchasing program.

In commodity markets, world crude oil prices rallied with a disappointing US new-home sales report fuelling speculation about the Federal Reserve's intentions to wind down stimulus. New York's main contract, West Texas Intermediate (WTI) crude for October, has closed at $US106.42 a barrel, a gain of $US1.39 from Thursday. The European benchmark futures contract, Brent North Sea oil for delivery in October, added $US1.14 at $US111.07 a barrel in London trade.>

Gold prices settled at their highest level in 11-weeks high after weaker US home sales data stoked hopes of sustained stimulus measures from the Federal Reserve. Gold for December delivery, the most active contract, on Friday rose $US24.90, or 1.8 per cent, to settle at $US1,395.80 a troy ounce on the Comex division of the New York Mercantile Exchange. This was the highest settlement level since June 6. Gold prices shot higher after data showed US sales of newly built homes fell 13.4 per cent in July to their lowest level since October.

Platinum prices touched a fresh four-month high. Platinum for October delivery rose $US1.50, or 0.1 per cent, at $US1,541.60 a troy ounce on the New York Mercantile Exchange - the highest settlement since April 9 - amid hopes that stronger global manufacturing activity would lead to greater demand.

Copper prices settled slightly higher on the London Metal Exchange (LME), supported by a run of strong economic data, although trading was cautious ahead of the weekend. At the PM kerb close on Friday, LME three-month copper was up 0.5 per cent at $US7,360 a metric ton.

Aluminium also traded up 0.5 per cent at $US1,892.50 a ton. Business activity in the eurozone in August rose at its fastest pace in more than two years, while in China a gauge of nationwide manufacturing activity on Thursday suggested the economy was stabilising.

The US dollar eased against major currencies in European and US trade on Friday in response to weak US new home sales data. The Euro rose from lows near US$1.3335 to ended US trade near US$1.3380. The Aussie dollar is higher at 90.39 US cents.

In the US, activity in the factory sector rose to a five-month high, as employment and new orders gathered steam. The LME is closed on Monday for a UK public holiday.>

In equity news, Nib Holdings (NHF) is expected to post full year results while Caltex Australia (CTX), Spark Infrastructure Group (SKI) and Boart Longyear (BLY) are slated to announce first half earnings